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Making the Sale
November 17, 2009
Ethics Expert Asks Are You (Or Your Company) Too Comfortable For Your Own Good?
I believe that one of the drivers of the subprime crisis is that everyone in the mortgage industry got too complacent. As more and more loans were originator, as home prices kept rising, as automated underwriting systems said what was being produced was OK for sale on the secondary market, various points in the origination cycle that used to ask questions stopped asking those questions.
This complacency opened the door for what is happening today.
On the topic of complacency, business ethics expert Christopher Bauer said, "Comfort is a wonderful thing and creating a good-sized dose of it helps us all stay healthy and happy. Unfortunately, though, not all comfort is created equal.
"One risky type of comfort is the kind we feel when we stop paying attention to our values and actions and, instead, lapse into acting by habit alone. This type of self-imposed ignorance throws open the doors to ethics problems because, once we are in that state, we have - essentially by definition - stopped self-monitoring.
"Routine monitoring of your decision-making processes, as well as how your decisions do or do not align with your stated values, is one of the cornerstones of catching ethics risks quickly. Consider any actions that do not align with your stated values to be a 'red flag' requiring further thought and review. This is, of course, true not only for yourself but for your organization as a whole.
"If you observe any behavior that is at odds with your stated values, it is critical that you determine what has caused that to occur and then determine how to prevent it in the future. If you see a pattern of such behavior, it's time to quickly decide whether it is your behavior or your stated values that need to change. Careful consideration of both options is required but know that, like it or not, it will almost always be your behavior that requires the change and not your stated values," Mr. Bauer said.
As the mortgage origination business gets back to normal, the question is will originators once again slip into that comfort zone and let the lapses happen again or will people learn their lesson and be more vigilant in their business practices?
Information on Bauer Ethics Seminars is available at http://www.bauerethicsseminars.com.
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Comments
Posted: 2009-11-17 19:41:48
by KB
Your article and particularly your closing statement "As the mortgage origination business gets back to normal, the question is will originators once again slip into that comfort zone and let the lapses happen again or will people learn their lesson and be more vigilant in their business practices?" has nothing to do with originators. This is a lender/underwriting issue. Originators can only originate and close loans per a particular lender's underwriting approval of that loan. The subprime crisis was due to stupid loan programs provided by lenders and their lax (for lack of a better word) underwriting policies. Period...Originators were not to blame at all for this. If they were then we would still see subprime loans being originated and funded. However, we are not seeing subprime loans being funded anymore. Why? Because lenders do not offer these programs anymore. The question is: Will LENDERS once again slip into that comfort zone and let the lapses happen again or will people learn their lesson and be more vigilant in their business practices? Answer: Of course not. The loans were stupid and the smart, albeit corrupt, lenders who did not hold onto those loans made their fortunes (e.g., Countrywide). Some of these same crooks (PennyMac) are now double-dipping on this opportunity (crisis) by buying up delinquent mortgages at massive discounts! http://www.businessinsider.com/ex-countrywide-execs-pennymac-files-for-an-ipo-2009-5. How these people can be allowed to do this is beyond comprehension but, as Mark Twain said, "Truth is stranger than fiction."
Posted: 2009-11-19 17:08:23
by VoyageHomeLoansCA
Great Article! FHA
